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Salesforce will lay off 10% of staff as part of restructuring
- Jach 4y agoHeard this has affected engineering too, not just or mostly sales as people were thinking or happened before. (I remember a hiring manager years ago telling me once that there hadn't ever been any layoffs, all I could think was "yet".) For those affected, typical full systems cut-off as well, not very ohana of them to just terminate with no notice... Still, not unexpected given everything else going on. Glad I'm not competing for tech jobs at the moment.
- thehappypm 4y agoNot terribly surprising. Salesforce sells enterprise products — the sales team is basically a necessity; overly cutting salespeople would have a big revenue impact.
- tootie 4y agoI wonder if a lot of this is just redundancy from their acquisition binge.
- fatnoah 4y agoThe quote below is from the email sent to employees, which was also filed with the SEC: https://www.sec.gov/Archives/edgar/data/1108524/000110852423000003/ex991-lettertoemployees.htm https://www.sec.gov/Archives/edgar/data/1108524/000110852423... > In the U.S., affected employees will receive a minimum of nearly five months of pay, health insurance, career resources, and other benefits to help with their transition. That minimum seems to be better than the best package I've seen so far in this layoff cycle. I got two months of garden leave plus an additional 3 months of COBRA. The garden leave was mandated by WARN act (or they would have to notify me and have me work for 60 days), so the only real severance was the 3 months of COBRA. Of all the "big" companies I've worked for, Salesforce was the top in terms of seeming to actually care about its employees and the world.
- deleted 4y ago[deleted]
- mkl95 4y ago> Stock rises after company announces broad restructuring plan focused on driving ‘profitable growth’ Could someone explain how layoffs lead to stock rises in layman terms?
- jdhn 4y agoLowering costs --> higher profits.
- missedthecue 4y agoWhy not fire 100% of employees in that case?
- raziel2701 4y agoYou guys always take it to the extreme. It's an optimization problem. The market thinks 10% is a pretty good number that will translate into higher profits, likely because they believe the people laid off are non-essential to the business. I don't know what percentage is too much, all I know is that the stock market is not the economy, and things that tend to be good news for workers and main street tend to be bad for the stock market. For instance, in the past ~6 months the labor market continues to be strong reporting many job openings, which is good for workers as this allows them to seek higher-paying wages. But the market went down after each report because it meant that JPow would further increase interest rates, which are bad for the majority of businesses since they don't have positive free cash flows and rely on zero interest rates to continue operating with debt. We've been living in the upside down for a while now. And gravity is coming back :)
- HDThoreaun 4y agoSalesforce employee count doubled since the pandemic started. Doesn't seem unreasonable to believe some of those employees can be cut without affecting revenue too much.
- paxys 4y agoBecause then the company can't operate? Is it really that hard to understand?
- bushbaba 4y agomakes sense given their employee to revenue ratio for Salesforce. They had 73,000 employees with just ~31B/year of revenue. That’s just 424k of revenue per employee. Such a ratio only makes sense with high growth rates.
- JanSt 4y agoAm I the only one who thinks $424k/employee is quite a lot? May be a too european perspective?
- apocalyptic0n3 4y agoThat's how I'm feeling too and I'm in the US. Just doing some rough math, my company is at around half that and we're doing quite well at the moment. We are much smaller though.
- tr3ntg 4y agoNo, the best startups run healthily at -$424k/employee, so any positive number is really great. (sarcasm)
- HDThoreaun 4y agorevenue is not profit.
- adamsmith143 4y agoWell for comparison revenue per employee at Apple and Google is ~$1,800,000 and $1,200,000 respectively.
- andsoitis 4y agoHere is a list of (American?) companies that make the most profit per employee. You can also see the list in terms of revenue per employee: https://tipalti.com/profit-per-employee/ https://tipalti.com/profit-per-employee/ At the top of the list is Air Lease, generating more than $4m profit per employee. I didn’t double check for correctness.
- 4y ago
- corry 4y agoI forget which podcast I heard it on (so forgive me if my memory is sloppy), but after their latest quarterly report didn't CAC payback go from 24 months to something wild like 10 years? Meaning their new ARR add rapidly fell off so quickly, before they adjusted their Sales and Marketing salaries and spending, that it immediately put their unit economics way way way way underwater. So I'd expect at least a big chunk would be S&M cuts, even through of course you still need salespeople. 10% of a 75k company is still 7k people. From the King of SaaS. Wild times.
- pryelluw 4y agoIt’s rather amusing, in a dark sense, that Salesforce is about to lay off part of their sales force.
- triceratops 4y agoCAC = Customer Acquisition Cost ARR = Annual Recurring Revenue S&M = Sales and Marketing Is that right?
- grantsch 4y agoMany many software companies end up spending more money to acquire a customer than a customer will ever pay them. I tend to think this is because the demand and need for many tools is not significant enough to justify the amount of capital allocated to promote them. Finance spreadsheet alchemists last 10 years saw big gross margins in software (overinflated by not taking into account cost to acquire user), bought into long-term incumbent dominance narrative from founders, and now they're stuck with companies that are willing to spend 10x+ lifetime customer value to acquire a user. Everyone with a vested interest in these companies/investments always seems to say the real returns are 10 years+ once they are in a dominant position in their industry and have monopolistic pricing power. How are we supposed to know what happens in 5 years, let alone 10+? Seems like a big carnival trick to me. What's interesting is that this mentality is so engrained that the people promoting it don't seem to even get that they're in on an act. You could have the best tool on the planet, but if the cost to distribute it is greater than what those customers acquired will ultimately pay you, you don't have a company.
- ubertaco 4y agoLast time they did this, it was _right_ after the window that they had grandstanded and asked other companies to pledge no pandemic layoffs. Benioff did a whole media tour talking about how Salesforce would do no pandemic layoffs to set some kind of example, and said that they didn't expect other companies to follow their example, but asked them to just pledge no layoffs for 90 days, even though Salesforce was going to do better than that. Around 91 says later, Salesforce laid off 10% of the company, with no prior warning to the employees who were laid off. The atmosphere internally from the top down was outrage that any of the employees who were laid off would mention that they got laid off to their family/friends/coworkers, and that doing so was somehow a betrayal of "trust". Brett Taylor, who was then the "co-CEO" (read: Benioff's cleanup crew and babysitter), led an all-hands a month or so later where they took no questions and referred to this as a "one-time reshaping exercise". Benioff slipped up and told MSNBC that this was an annual thing. Brett Taylor pretended not to know Benioff had said that, and acted like it never happened. This all-hands was a full month after the all-hands that took place the same week as the layoffs. In that one, they took questions, but since all the questions were about the layoffs, they acted like nobody had submitted any questions and the Q&A host came up with some softball "what projects are you excited about"/"what's the biggest challenge with being a market leader" ego questions instead. I didn't believe that it was "one-time" then, and today I've learned that I was right not to. I left before it became a habit, and have only been relieved to have left. I wonder when the next annual 10% layoffs will happen at Salesforce? Because it's pretty much the only thing I'd trust them to do reliably at this point.
- prettychill 4y agoThe post pandemic layoff was nowhere near 10%
- ubertaco 4y agoMy sense of scale is a bit thrown. I think at the time with all the uncertainty and the inability to trust corporate leadership, I trusted the largest number I heard as internal scuttlebutt, which was 10%. The actual number was somewhere around 1,000 to 1,500 people, which was like 5% or something of the company. ...but was still 1,000 to 1,500 people.
- rwaksmunski 4y agoHow about their future prospects? From the 4 implementations I've seen all are desperately trying to leave the platform. One succeeded so far. Is the enterprise Salesforce craze over?
- jeromegv 4y agoThey have hundreds of thousands of customers and been growing for more than a decade, I don't think you can imply a lot from the 4 implementations you've seen.
- tibbydudeza 4y agoVWAG is switching to Salesforce for CRM (ex-SAP) - really can't blame them to be honest.
- makestuff 4y agoThe lock-in is insane with salesforce. I think it is similar to excel at this point, sure there are competitors (google sheets, etc.) but none of them are serious threats to excel yet. Maybe in the next decade excel will start to lose significant marketshare, but not anytime soon. Salesforce seems to be similar in that it is so ingrained and people don't want to learn a new system.
- marcosdumay 4y agoMy impression is that there are exactly 2 groups of management, completely disjoint: those who want to have salesforce, and those who have salesforce.
- Scubabear68 4y agoWhenever I look at client’s Salesforce setups, I always wonder in the back of my mind what they will do if Salesforce has a significant down-turn? The lock-in to the platform appears to be very fierce. Are there viable routes to exit Salesforce if anyone ever needed to? (Note: I’m not saying Salesforce is doomed or anything, just the layoffs got me thinking in that direction theorically).
- spamizbad 4y agoMy company is currently undergoing this and I have the same feeling. But I think the business model behind it is you hire a "Salesforce consultant" to steer your integration with the understanding that you can replace a small team of developers doing a home-rolled solution with a single developer who runs your SF integration. And Salesforce slurps up 60% of the labor cost savings and you keep the 40% and declare success.
- deleted 4y ago[deleted]
- ROTMetro 4y agoAnd lose in-house knowledge experts. Lose the people with buyin on projects success. Lose the people and department that had built the interdepartmental relationships to push big ambitious changes forward (because no 'consultant' is going to recreate those relationships with their seagulling). You have to be a completely shallow business when it comes to business practices for this model to benefit you. But the lost opportunity cost of not having these resources isn't immediately visible so it's ignored. Until a company that gets it comes along and eats your lunch because they are nimble and their own entity, not a Salesforce franchise posing as a business.
- spamizbad 4y agoOh, I agree. For what it's worth, nobody got "cut" -- those devs are now buried in a different pile of work. Really so much problematic SaaS (or PaaS) stuff all boils down to crude hacks to work around labor shortages.
- newaccount2021 4y ago[dead]
- eganist 4y ago"and I take personal responsibility for that." As usual, no accountability for it. Just responsibility. I take it boards are incapable at holding leaders accountable for bad decisioning?
- deleted 4y ago[deleted]
- vrc 4y agoBoards see this as good “decisioning”. Decisions are made by proportional controllers — money cheap, hire and grow, money expensive, fire and slow. So execs are being very prudent here, according to investors.
- eganist 4y agoYeah that's what breaks my heart. It's gratuitously meaningless language designed to soften the human blow even though everyone who doesn't rely on Salesforce employment for a paycheck ends up benefiting. So there's no check on over-hiring and then dumping once convenient.
- fatnoah 4y agoThis always gets me. Executive "responsibility" in cases like this is ballooning wealth as a result of the too-rapid growth, and then a further increase when the stock pops as a result of the layoff announcement. A stock gain of currently $2.71/share means Benioff is almost $71 million richer (in unrealized gains).
- MaxHoppersGhost 4y agoWould be great to see a CEO’s performance plan cut (options taken away or something) rather than this crocodile tear act we always see. In some industries CEOs take paycuts to keep folks employed but you don’t see that in tech. The “responsibility” is all fake.
- willcipriano 4y agoKnow what's odd to me? It seems like every company that did layoffs over the past 3 months overhired by 8% - 12% somehow. Why was it such a narrow range?
- xeromal 4y ago10% is about the number you can layoff without causing a route.
- cookieswumchorr 4y agoThe Romans knew what they were doing :)
- deleted 4y ago[deleted]
- siggen 4y agoAre you able to add a reference? I am curious about the mention of Romans. Thanks!
- xeromal 4y agoDecimate was how the romans culled a weak unit. They would kill 1 in 10. https://en.wikipedia.org/wiki/Decimation_(punishment) https://en.wikipedia.org/wiki/Decimation_(punishment)
- xeromal 4y agoWow, you're right. It's a decimation to the T. Hmmmm.
- tibbydudeza 4y agoThere is also "Muskification" as seen at Twitter.
- David_Axelrod 4y agoCould be a harbinger of whats to come. Reminds me of this Sequoia graphic. https://twitter.com/PanchalBrinda/status/852947043576426500/photo/1 https://twitter.com/PanchalBrinda/status/852947043576426500/....
- stcroixx 4y agoBut I just saw this commercial on TV where Mathew McSomethingOrOther led legions of happy looking people through the streets of a city pledging to change how the world works all because of Salesforce.com . It looked like an expensive commercial. I know I'd sign up if I could. Is this the first step? How exciting.
- sbr464 4y agoLink to the commercial: https://www.youtube.com/watch?v=FkHENcNlwDM https://www.youtube.com/watch?v=FkHENcNlwDM
- Apocryphon 4y agoI am also partial to this one. https://www.youtube.com/watch?v=duJwGSUhRQA https://www.youtube.com/watch?v=duJwGSUhRQA
- mensetmanusman 4y agoThere are over two jobs open for every layoff. People haven’t realized how crazy the labor market is about to get with a collapsing workforce population over the next many decades.
- csbingel 4y agoThere are, but the people aren't necessarily where the jobs are. I've got positions in Huntsville, AL that aren't remote-capable, and we cannot get people to even apply.
- andsoitis 4y agoCan you share some of the job listings?
- mensetmanusman 4y agoThat’s the thing, with this labor market businesses might start opening new locations or moving. I see that happening with hardware startups.
- deleted 4y ago[deleted]
- neon_electro 4y agoDo you publicly display your pay (range)?
- deleted 4y ago[deleted]
- p_j_w 4y agoFor a while it was fashionable to tell people who were having a hard time finding work that they needed to move. I'm wondering if people are so tolerant of suggesting it the other direction, so: Have you considered moving?
- kypro 4y agoIn theory less people working means less demand, which means less of a need for labour. Places like Japan where you have had a collapsing working population for years have never seen similar spikes in job openings like the US is currently seeing, https://tradingeconomics.com/japan/job-vacancies https://tradingeconomics.com/japan/job-vacancies The US saw a crazy spike in job openings at the start of 2021 which has only recently started to show signs of cooling. So imo what we're seeing in the US is much better explained by the $2T stimulus injection that occurred at the start of 2021 than demographics. https://tradingeconomics.com/united-states/job-vacancies https://tradingeconomics.com/united-states/job-vacancies
- VincentEvans 4y agoI propose the title should be changed to “Salesforce decimates staff as part of restructuring”. :)
- marvel_boy 4y agoAbsolutely, in Roman times 'decimatio' was the punishment for a poor result in battle. The soldiers were obliged to choose one of ten, and kill him.
- Zigurd 4y agoHuh. Romans invented stacked ranking.
- Hasz 4y agoIt’s a bit more ironic than that —- at least according to to Wikipedia, they drew lots (I.e randomly) for the individual who was killed.
- llampx 4y agoLayoffs
- autophagian 4y agoI get the feeling that this is more-or-less how stack ranking actually tends to pan out.
- thomasjudge 4y agoMore like, managers playing favorites
- jrs235 4y agoThe toxic reason to never miss unpaid happy hours!
- dan-0 4y agoMaybe it's just the segment I'm in, but I feel like Salesforce was hiring pretty hard up until recently. They wouldn't be the only company to go from a hiring spree to layoffs that quickly over the last quarter. We really need to lock this absurdity down and increase severance requirements for large companies heavily. It's one thing to gamble risk for the company, it's something completely different to gamble employee livelihood when you're signaling job security by hiring.
- coredog64 4y agoWARN Act already exists and has state level analogs that strengthen it to some extent. https://en.m.wikipedia.org/wiki/Worker_Adjustment_and_Retraining_Notification_Act_of_1988 https://en.m.wikipedia.org/wiki/Worker_Adjustment_and_Retrai...
- alistairSH 4y agoWARN doesn't apply if... - layoff results in fewer than 50 workers losing their jobs at a single employment site - If 50 to 499 workers lose their jobs and that number is less than 33% of the employer's total, active workforce at a single employment site These seem to let some* tech companies off the hook. * Those that are highly remote or distributed.
- symlinkk 4y agoIf you do that companies will be more reluctant to hire, since they’ll have to factor in the risk of paying a hefty severance.
- urfullofsht 4y ago[dead]
- shafyy 4y agoThat's the whole point
- 4y ago
- iancmceachern 4y agoCan they also stop doing their yearly conference in SF?
- mikeryan 4y agoThe frustrating part of bad economic times is that bloated companies use it as an opportunity to clean house while projecting a positive signal to Wall Street. This move probably would have been just as needed two years ago but would have tanked the stock at the time. It’s sucks when real people get caught up in companies just virtue signaling to Wall Street
- ww-picard-do 4y agoIndeed, it sucks to be laid off. But how is company's reducing costs "virtue signaling"?
- mikeryan 4y agoIt's the timing. For the sake of the argument here I'll give Salesforce the benefit of the doubt that this is the "Smart" thing to do. If Salesforce does a reduction in force when the economy is strong it get spun by Wall Street as a sign of weakness and their stock takes a hit. Do it in a down economy and it's a sign of strength and Wall Street rewards them (stock is up 3% today). Salesforce did fine through COVID, heck the stock price basically doubled from 2020 to 2021. So they hire like crazy knowing it's unsustainable. Now their stock is at pre-pandemic prices and they start letting all those folks go when they're most vulnerable.
- craigkerstiens 4y agoLayoffs suck no matter what. But from what I'm hearing they're giving some pretty good severance across the board and added time for tenure as well. That said there are some bumpy things about how Salesforce seems to have handled this. In several cases managers and skip levels got no advance notice and were left scrambling in slack to see which team members no longer had active accounts. At the mass of a level it can be hard to be coordinated, but still a few hrs after there is a lot of unclarity internally to teams and what that means. Within Heroku there are folks currently on call for production systems that were impacted. I feel for those impacted as well as those still there scrambling to ensure things continue to operate for customers. Seems that within the broader Salesforce org some pieces of it were done in a better fashion than some others we've recently seen, but also some pretty missteps still.
- 29athrowaway 4y agoDid it trigger the WARN act?
- mustafabisic1 4y agoNot fun. I read somewhere a year ago that there will are more than 10000 salesforce cloud related jobs available and can't be fulfilled. For me it looks like Salesforce is here to stay. We'll see how it goes for them if their clients start to tank.
- sdf4j 4y agoCompletely random engineering layoffs are happening today. Skipping management levels and firing people that are in the critical path of products about to launch. Makes you wonder how "structured" are these restructuring efforts.
- fatnoah 4y ago>Completely random engineering layoffs are happening today My gut is telling me that the "randomness" is intentional to eliminate, minimize, and/or mask any potential bias in the process.
- xena 4y agoWhy do CEOs claim to "take responsibility" for the hard times, but their salary is never cut because of it? If they were actually taking responsibility then they would face real consequences instead of dooming people to no longer having healthcare. Fucking rich people.
- pengaru 4y agoCut? They'll take huge bonuses if they manage to fail so hard to require a government bailout, as if one should be rewarded for opening access to the federal taxpayer cookie jar.
- missedthecue 4y agoEd Bastian, CEO of Delta Airlines requested the board cut his salary when he had to lay off people during the covid travel implosion. I think it ended up being cut 50% that year.
- cableshaft 4y ago"As Chief Executive Officer at DELTA AIR LINES, INC., Edward H. Bastian made $12,360,420 in total compensation. Of this total $950,000 was received as a salary, $3,038,542 was received as a bonus, $4,125,062 was received in stock options, $4,125,186 was awarded as stock and $121,630 came from other types of compensation. This information is according to proxy statements filed for the 2021 fiscal year." Salary is often one of the smallest parts of a CEO's compensation, so it doesn't mean a whole lot. It's better than nothing, though. Source: https://www1.salary.com/Edward-H-Bastian-Salary-Bonus-Stock-Options-for-delta-air-lines-inc.html https://www1.salary.com/Edward-H-Bastian-Salary-Bonus-Stock-...
- lycopodiopsida 4y agoEven if a CEO takes a cut, how will it look like? Going from 20m bonus to 10m? Hardly an existential threat, compared to a laid-off employee.
- ghiculescu 4y agoSalesforce stock is down 45% in the last 12 months. There’s the pay cut.
- unixhero 4y agoUsed to implement Salesforce for companies. Loved it, end users and customer mostly loved it.
- atraac 4y agoIs this sarcasm? Because my(and everyone I know) experience is absolutely opposite. Salesforce is a shitshow of old pseudo-Java and pseudo-SQL that lack features and proper support. It lock everything behind rate-limits that require you to swipe company credit card to achieve anything. It's slow(both UI and as a development process), hard to work with, INSANELY expensive, most issues are never resolved, or even answered on their official forums.
- unixhero 4y agoWe didn't go that deep, so the legaxy spaghetti didn't hit us. The client was filthy rich and needed to transform core business processes. Time to market on changes we wanted was nearly always "before lunch". And anything custom we were able to do too.
- scrumper 4y agoThis corporate bulimia, these binge-and-purge cycles, are a remarkably unpleasant feature of 21st century employee life. I hope those affected are able to find work before their severance runs out. One positive aspect is that the Salesforce ecosystem is gigantic, and there'll be work for some in the partner firms and consultancies with expertise in the platform.
- kirse 4y agoWhat we need is 1-5% of these 10/20/30%+ layoffs go on to start new businesses. We've had a solid decade+ of FAANG dominance now and arguably all of these companies are comfortably milking existing cash cows with minimal innovation and increasingly degraded product experiences. I'm trying to think of one large tech company that has a better core product today than 10 years ago. Maybe Shopify / MS? Someone help me out.
- VirusNewbie 4y agoAWS and GCP are both much better.
- Spivak 4y agoEh, I kinda doubt your typical startup is going to sprout up and compete with FAANG. They could, and some will, but that shouldn't be the goal. I think people forget that 25-50 mil arr businesses are small potatoes to megacorps but can happily and gainfully employ lots of workers. Getting into a market that is big enough to pay the bills but small enough to not attract attention is a good place to live. And hell, if you need ideas just look at the businesses that the megacorps discard because they're only million dollar ideas and not billion.
- mrguyorama 4y agoPlenty of new companies have popped up over the past two decades, but every single time, if they make any progress on anything that might someday make money, a mega-corp will throw $300 million at them and competition solved! It's hard to be angry at the company for selling out, because the way capitalism works is all the money goes to the individuals who are able to effect the decision, so they get life changing amounts of money even though everyone else gets pennies, if that. But it should be clear how detrimental this system is to a functioning and competitive market.
- ivraatiems 4y agoA friend of mine was hired by Salesforce in January. He worked there for six months. In that time, he did the haphazard onboarding they offered him... and that was it. Every day, he would ask his manager for work. Every day, his manager would tell him to hang in there, work was coming soon. He never did a single moment of actual money-making or money-saving work for the company. They paid him about $50,000 for the privilege. Exhausted by the absurdity of the situation, he quit, and is now making substantially more money elsewhere... but also has actual work to do. Nice gig if you can get it, I guess.
- maximinus_thrax 4y agoNot sure what is the point of this anecdote. In any company of 7k people, regardless of how lean it's run, you'll definitely find at least one person in that situation. I think you're trying to say that Salesforce did the right thing to lay off 10% of its workforce, which would be quite insensitive in this context.
- ivraatiems 4y agoIt wasn't "at least one" person - it was his whole org, everyone his manager managed, his director, etc. I'm saying that if Salesforce has employees in this situation, they are making poor hiring decisions and it's no wonder they had a spare 10% of employees to lay off. I certainly am not glad anyone got laid off, but we wouldn't be in this position in the first place if Salesforce knew what they were doing.
- sfdcthrowaway 4y agoHas anyone who is a part of the sales org (AE or SE) been impacted as part of this layoff? I saw a huge number of post-sales/HR roles laid off but haven't heard of people as part of pre-sales that have been laid off. Not sure if more layoffs are to come at the beginning of Q1 in Feb.
- sacnoradhq 4y agoNo surprise. CRM and similar are used by many outbound groups, including recruiters. Recruiting shrunk except for senior tech and executives.